Stellantis CEO, Carlos Tavares, said something that definitely tracks. He said he believes Chinese auto manufacturers are selling EVs below cost… in a predatory strategy to put legacy car companies out of business.
HOW can Chinese car companies afford to sell under cost?
You have to understand that Chinese government & Chinese business is one in the same. So they play by different rules. It’s called communism. They don’t have to turn a profit. China can play the long game… and they have been playing the long game with EVs.
WHY would Chinese car companies sell under cost?
European & American politicians have stood up like fools, and proudly declared the end of the internal combustion engine. They have released the dates where car manufacturers will no longer be able to sell gas-powered cars. And they have tied the hands of the automotive industry. Over-regulated them. Keep in mind – the citizens never voted for the death of all internal combustion engines. Rather, governments decided for us.
What do you think China does with such a gift?
They scale up their own EV production & sell EVs at a loss. Undercut prices, and build their brands. Enter the European, Japanese, and American markets. And continue selling at losses right up to AND THROUGH the dates of the politically-forced EV mandates. At which point, China will have obtained a much more comfortable EV-to-EV playing field, since politicians have taken away gas-powered options. Except China still doesn’t have to make a profit yet. So they will continue selling below cost until they squeeze the legacy car manufacturers out of business. It is at this point, that China will have effectively stolen the automotive industry as we know it. And it’s also at this point, where Chinese car manufacturers will raise their prices. China is playing chess, while our politicians seem to be playing with building blocks.